A (displaced) Cumbrian tries to explain new Oxford and economics…
We assume that it will be late August when we shall see the cessation of on-road competition on four main corridors out of Oxford. These are the Banbury, Cowley, Iffley and London Roads. Here, the Thames Transit colour-coded minibuses of old have expanded to route-branded low floor Stagecoach single decks, competing with similarly route-branded red low floor Oxford Bus Company single decks.
Buses along the Cowley Road will henceforward be in partnership...
The operators currently compete along the four corridors, each running single deck buses every five or ten minutes. Under the plan, in come double decks every four or eight minutes (or so), alternating between Stagecoach and the Oxford Bus Co. There will be common branding and ticketing.
The deal was brokered in response to county council plans to pedestrianise large swathes of the city centre, moving the buses out. The two companies recognised the affect buses were having on the city and also the consequences should Oxfordshire’s plans be set in stone. Pragmatically, collaboration rather than competition was a solution and it offered the operators economies, too.
... and along the Banbury Road
Market economists might argue that such a partnership move would cause concern for passengers. The new Oxford regime moves from on-road competition to collusion. This would not normally be tolerated but is permissible as the council believes it to be in the interests of passengers.
Collusion brings fares concerns. Economists might argue that the industry offers a natural monopoly. This means that it might be at its most efficient when provided by a single supplier. The economies of scale of a single supplier can maximise the return. As an illustration, in simple terms, telephone networks costs less to operate per head the more subscribers there are, and the more customers there are the more attractive the service becomes. This natural monopoly is why we regulate the telephone industry. Translating this to a bus network, effectively the more buses operated *effectively* as a single supplier, the higher the price passengers are willing to pay. And here lies the problem: the increased frequency of bus services that one can use with one ticket should make the service more attractive, and increase that willingness to pay, therefore increasing the fares that are actually charged. And the buses cost less to run. Everyone wins! Except the people who can’t or won’t afford the new service...
Balancing this, collaboration might have other benefits. Take Risinghurst estate, adjacent to the competitively served Barton estate at the end of the two-every-eight-minutes Oxford Bus Co/Stagecoach competitive London Road corridor. The estate has only a 30-minute weekday daytime service. Under the partnership proposal, it is expected to gain at last an evening and Sunday service.
So much for the corridors. What about the rest of the network and other operators? This is unclear. Stagecoach run three buses an hour down the Banbury Road bound not for Kidlington like most of its buses and the Oxford Bus Co’s too, but for Bicester. Will the common tickets be good on these? Will the fare structure extend to buses like the Brookes ones, which provide certain peripheral networks? Will the residents of more diverse corridors, like the Botley Road with six Oxford Bus Co and five Stagecoach buses an hour to various destinations benefit, too? Will the sundry other operators, running to country destinations feature? Arriva run two buses down the London Road bound for Aylesbury...
5 comments:
what a complex problem!the issue of competition v cooperation is beyond my ability to comment.suffice to say there are a dozen other operators who serve oxford plus natex. i have nothing against pedestrianising some streets except that it forces more buses on to the remainder.should oxford council not be looking at exeter where the pedestrianised main street is used by buses only.the biggest concern to me is the plethora of different termini used by bus services.i did comment last time this blog mentioned this subject .should not the city fathers look to build a decent sized bus station to house all these bus routes.i suggested the car park below gloucester green which would easily support a multi storey car park with a bus station below.i would welcome comments from the locals on this.
Integrate ticketing, integrate timetables, increase attractiveness of overall product offering, remove unneccesary duplication, reduce operating costs, reduce emmisions, use saved resources to improve services on other corridors. A victory for common sense!
What is finally being realised is that - in the real world rather than the economics textbooks - it is a fundamentally makes no sense to have two half empty buses chasing each other to the same place, when they could instead be two full buses going to two different places.
And on a slightly different but related point, is there any word yet on what the new coalition government will means for buses? The policies of the two parties were chalk and cheese on this issue.
The other big advantage of a monopoly within one area (particularly in a large town or city) is area-wide ticketing.
A few years ago, First ran almost every local bus within York - there was still some competition along the radial routes from interurban routes by other operators, but the vast majority of passengers travelling within York would be using First. And while they moaned like heck about some features of the service, they could at least buy a First Day and travel pretty much anywhere in the city.
Now several of the suburban routes are run by other small operators for some or all of the time. The price of a First Day has carried on up as normal, even though its coverage has been reduced. So now people in some districts and satellite villages have to pay significantly more, not because any one fare has gone up, but because they now have to buy two tickets to make a two-stage journey, rather than one ticket that covers the whole lot.
The scope of the project doesn't include area-wide ticketing - this is one of the things unclear. It is just a (statutory) quality partnership along the four corridors.
The scope of the project doesn't include area-wide ticketing
Do you know if the new joint services on these four routes will accept the current season passes from both Stagecoach and Oxford Bus? It will be a disaster for regular passengers if they don't.
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